PG&E announces $13.5 billion settlement in Wine Country...

1of10A Black Bear Diner and nearby businesses burn as the Camp Fire destroys a large portion of Paradise in Butte County, Calif.. on Thursday, November 8, 2018. The wildfire claimed 85 lives and over 14,000 structures and left 50,000 homeless.Photo: Scott Strazzante / The Chronicle

2of10Suzanne Kaksonen looks through her property for the first time after the Camp Fire tore through the area.Photo: Gabrielle Lurie / The Chronicle 2018

10of10Frank Matoes (right) hugs his neighbor Phyllis Bremer as he sees her for the first time since the Camp Fire destroyed their homes.Photo: Gabrielle Lurie / The Chronicle 2018

PG&E Corp. has struck a $13.5 billion deal to settle legal claims against it from victims of 2015, 2017 and 2018 wildfires, a landmark agreement that should pave the way for a speedy resolution of the embattled energy company’s bankruptcy case if it is approved in court.

The settlement would pay victims of the wildfires, which killed more than 100 people and destroyed more than 20,000 buildings, in a mix of cash and stock, the details of which PG&E did not disclose in announcing the deal Friday evening. More details are expected Monday.

PG&E would provide the funds for people who lost homes and loved ones in the fires state investigators have found it responsible for, including the 2018 Camp Fire, 2017 North Bay fires and the 2015 Butte Fire. The company and subsidiary Pacific Gas and Electric Co. have also agreed to pay victims of the 2017 Tubbs Fire in Sonoma County, which state investigators said was caused by a resident’s private electrical system, and the 2016 Ghost Ship warehouse fire in Oakland.

PG&E said it was not admitting fault for the Ghost Ship fire, in which 36 people died, or the Tubbs Fire, which killed nearly two dozen people and destroyed more than 5,600 buildings in and around Santa Rosa. It’s not yet clear exactly how victims of the different fires would be treated financially under the deal.

PG&E and lawyers for victims of the Tubbs Fire had been preparing to face off in front of a San Francisco jury at a trial next month over whether the company is responsible for the blaze. That apparently will no longer be necessary.

The deal with victims is by far the largest milestone to date since the PG&E parent company and utility subsidiary both filed for protection under Chapter 11 of the U.S. Bankruptcy Code in January, buckling under a bevy of lawsuits blaming it for conflagrations that killed dozens, left whole neighborhoods in ruins and almost completely destroyed the town of Paradise (Butte County).

PG&E Corp. CEO Bill Johnson said in a statement that paying individual fire victims fairly has been the company’s “primary goal” since it filed for bankruptcy. The company, he said, wants to help burned communities rebuild and is focused on emerging from bankruptcy as “the utility of the future that our customers and communities expect and deserve.”

“There have been many calls for PG&E to change in recent years,” Johnson said. “PG&E’s leadership team has heard those calls for change, and we realize we need to do even more to be a different company now and in the future. We will continue to make the needed changes to re-earn the trust and respect of our customers, our stakeholders and the public.”

Prior to the $13.5 billion deal with victims, PG&E had already reached agreements to pay $1 billion to a group of local governments and $11 billion to insurance companies that already paid billions to homeowners. U.S. Bankruptcy Judge Dennis Montali — who will need to approve the new $13.5 billion deal with victims — was still weighing whether to approve the insurance agreement as of Friday.

After PG&E announced the settlement, the committee representing individual victims involved in the bankruptcy case released a statement reminding people affected by the PG&E-caused fires to file claims against the company by the Dec. 31 deadline. More information is available at www.officialfireclaims.com.

Kirk Trostle, a fire victim and member of the committee, said in the statement that the $13.5 billion agreement was reached in part “to give fire victims ... the best chance at being fully compensated for their harms.”

“Eligible victims who have not yet filed should see this agreement and realize there is, in fact, money available to help them rebuild their lives,” Trostle said.

Though Montali and PG&E’s state regulator, the California Public Utilities Commission, will both need to approve the company’s plan to emerge from bankruptcy protection, the agreement with victims could place the case on track to wrap up well in advance of the June 30 deadline set by a new state law. PG&E must resolve its bankruptcy case by that date to take advantage of a fund that will give it a financial cushion against any future wildfire costs.

While PG&E touted its deal with victims, Tom Dalzell, the head of the company’s largest union, said he still harbors some skepticism about its future.

Dalzell, business manager of IBEW Local 1245, told The Chronicle that PG&E emerging from bankruptcy in its current form with the same leadership could prove immensely challenging on the political front.

“I don’t think the Legislature is going to be at all inclined to do anything to help them,” Dalzell said. “The animosity toward PG&E and the lack of confidence in PG&E is intense. I don’t know if this is progress or not.”

Dalzell’s union, which represents about 12,000 PG&E employees, has opposed efforts to break up the company — including San Francisco’s offer to take over its local power lines. The union wants PG&E to be “viable,” Dalzell said.

“Our read all along has been that PG&E with a little bit of lipstick is not going to be viable in the long run politically,” he said. “We want the company intact. We want the workers protected. There has to be some fundamental change, and I don’t know whether … painting the trucks green is going to do it.”

San Jose Mayor Sam Liccardo, who has been pushing to transform PG&E into a customer-owned cooperative, told The Chronicle that the deal with victims will not deter him from pressing forward with the idea. The settlement “treats a symptom, but not the disease,” he said.

J.D. Morris is a business reporter covering PG&E and local efforts to develop coronavirus treatments or vaccines.

Before joining The Chronicle, he was the Sonoma County government reporter for the Santa Rosa Press Democrat, where he was among the journalists awarded a Pulitzer Prize for their coverage of the 2017 North Bay wildfires.

He was previously the casino industry reporter for the Las Vegas Sun. Raised in Monterey County and Bakersfield, he has a bachelor’s degree in rhetoric from UC Berkeley.